Section Fourmanagerial authority, encourage them to leave, or establish a
convincing paper trail in the event that the employee is
terminated.^16
STRATEGICALLY ORIENTED
COMPENSATION SYSTEMS
One of the critical means by which organizations implement
their strategies is to reward employees for behaviors that are
consistent with strategic goals. Reward systems provide the
ability to reinforce desired behaviors and serve the traditional
functions of attracting and maintaining a qualified workforce.
Because of the centrality of compensation to strategy, the
following discussion will focus only on rewards distributed
through compensation systems. As indicated earlier in this
section, a critical determinant of whether a strategy will be
successfully implemented is the degree of flexibility of the
workforce. In order to gain more flexibility from their
workforces, many organizations have implemented new
compensation approaches. Four of the more well-known
compensation innovations are (1) skill-based pay,
(2) broadbanding, (3) team-based pay, and (4) variable
compensation. These approaches will be examined in this
section along with executive compensation. However, before